Russia's Gazprom Seeks Arbitration In Price Dispute With Turkmengaz

Gazprom has filed a lawsuit against Turkmenistan's Turkmengaz at an international arbitration court in Stockholm.

Officials from the Russian gas giant said on July 24 that the lawsuit was filed over the price in a supply contract, but gave no details.

In February, Turkmengaz accused Gazprom of being an "unstable partner" and said earlier this month that Russia's state-run gas giant had not paid for Turkmen gas shipped since the beginning of 2015.

Gazprom declined to comment at the time.

Gazprom purchases natural gas from Turkmenistan for its own use or resale. But the volume has fallen this year as Turkmenistan ramps up natural-gas deliveries to China.

The Russian edition of Forbes magazine reported on July 24 that the price Russia pays for Turkmen gas is about $240 per 1,000 cubic meters.

Turkmenistan supplies some 30 billion cubic meters of gas to China each year and plans to double that amount by 2020, while Gazprom plans to start gas sales to China in 2018, gradually increasing flows to 38 billion cubic meters per year from east Siberia.

Gazprom said in December that it would cap its purchases of Turkmen natural gas at 4 billion cubic meters in 2015, significantly lower than the annual average of around 10 to 11 billion cubic meters since 2009.

Turkmenistan owns the world's fourth-largest known reserves of natural gas but has limited infrastructure to export its energy resources.

Ashgabat supplies around half of China's total natural gas consumption through a pipeline built by the China National Petroleum Company that began operations in 2010.

With reporting by Reuters and AFP

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